January 2026 not set for fuel surcharge – FG

For days, Nigerians have been bracing themselves for yet another increase in the cost of living: a five per cent surcharge on petrol and diesel, rumoured to take effect in January 2026. But the government has pushed back against the reports, insisting the levy has no fixed start date.

The clarification came from the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, who said the new Harmonised Tax Act signed in June by President Bola Tinubu does allow for the surcharge on fossil fuels. But, he stressed, only the finance minister can decide when it begins, and January 2026 is not on the calendar.

“What we have is that there’s a law that was enacted some years back with a surcharge on fuel under the Federal Roads Maintenance Agency Act. This is a provision that is now in the new tax law, and it does not take effect as of January 2026. I know some people have been giving wrong information about this,” Oyedele said in a video seen by Saturday PUNCH.

Fuel costs drive the price of nearly everything in Africa’s most populous nation, from transportation to food. The five per cent surcharge, when eventually implemented, will apply to the sale of fossil fuel products such as petrol and diesel, but it excludes clean or renewable energy sources like cooking gas, compressed natural gas, household kerosene, and other cleaner fuels.

The surcharge provision is not entirely new. It was first introduced under the Federal Roads Maintenance Agency Act, 2002, which created FERMA as a statutory body responsible for monitoring and maintaining all federal roads across Nigeria. The Act was enacted by the National Assembly and signed into law by then-President Olusegun Obasanjo in November 2002.

A significant change came with the 2007 Amendment Act (Act No. 18 of 2007), which introduced a funding mechanism through a five per cent user charge on petrol and diesel. A copy of this document, obtained by our correspondent, shows that 40 per cent of this fund is allocated to FERMA, while 60 per cent is directed to State Roads Maintenance Agencies.

The tax executive emphasised that the law empowers the Minister of Finance to issue an order specifying when the surcharge would begin, stressing that implementation would only happen when the government considers the timing appropriate.

“The intention is to earmark and dedicate the revenue from this tax to providing transport infrastructure that can reduce the cost of transporting items and logistics and overall bring down inflation for the Nigerian people,” the committee chair explained.

Since President Bola Tinubu scrapped fuel subsidies in 2023, petrol prices have more than tripled, and inflation has accelerated. Revenue-driven Tinubu, who is spending 10 days in Europe on a working vacation, faces public concern that another fuel levy, whenever enforced, could worsen the cost-of-living squeeze and complicate efforts to stabilise the economy.

Critics of Tinubu have accused his administration of focusing more on generating revenue than on ensuring accountability for how funds are spent. The president and his cronies have, however, defended his fiscal strategy, pointing to early successes in raising government earnings.

Tinubu, this week, announced that Nigeria had already achieved its 2025 revenue target as of August, months ahead of schedule. He said this milestone marked the end of the country’s reliance on borrowing to fund its budget. According to him, the government’s emphasis on diversifying revenue sources beyond oil, particularly in agriculture and other non-oil sectors, was central to this achievement.

Executives at the Nigeria Labour Congress, speaking anonymously to Saturday PUNCH, said the union had not received any formal communication from the government on the proposed fuel surcharge.

One senior official noted that organised labour would only take a position after its decision-making bodies had met. ‘When we do, we will call a meeting of the organs to deliberate on it,’ the official said. The NLC has previously led nationwide strikes over fuel price increases, and its response is likely to shape how the public reacts if the levy is eventually enforced.

On Thursday, former presidential candidate and prominent opposition figure, Peter Obi, strongly criticised the plan, calling for the government to halt the levy. He argued that introducing an additional tax at a time when Nigerians are already struggling to afford transport would worsen hardship.

“Leadership should be about reducing the suffering of Nigerians, not increasing their financial burdens, especially when the government has claimed to have met its revenue targets,” Obi said.

He added that the promised subsidies on alternative fuels like compressed natural gas had quietly disappeared, making even cleaner fuel options unaffordable. Obi questioned why the government was imposing new taxes on citizens already under strain and urged that revenue gains should instead be channelled into improving education, healthcare, and poverty alleviation.

Source: Punch